This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article.

November 4, 2011

Papandreou Reportedly to Step Down as Greek Prime Minister

As confidence vote looms, he says call for referendum was mistake

Greece's drama on the international stage continued on Friday as a confidence vote, scheduled for later in the day, could end its prime minister's career whatever its outcome. Sources in Athens said that George Papandreou, acknowledging that his call earlier in the week for a referendum on the country's newest bailout was a mistake, had agreed to step down even if he won. However reports on the matter vary and Papandreou may yet remain.

According to a Reuters report, Papandreou insisted at first that he would not resign, but was convinced otherwise during a Cabinet meeting. He agreed that, provided he won the confidence vote, he would remain long enough to negotiate an agreement with the opposition party and then step down. An anonymous source was quoted saying, "He was told that he must leave calmly in order to save his party. He agreed to step down. It was very civilized, with no acrimony."

However, a report in The New York Times details the back-and-forth of Papandreou's maneuvering. Antonis Samaras, leader of the opposition, has consistently voted against every measure related to the current and previous bailouts, although he denies that he opposed the deals and says instead his opposition was directed at the governments handling of them.

After Papandreou's call for a referendum, Samaras conceded that he would back the loan arrangement. Only then did Papandreou abandon the referendum. He was quoted saying, “The question was never about the referendum but about whether or not we are prepared to approve the decisions on Oct. 26. What is at stake is our position in the EU [European Union].”

Greek citizens have been protesting austerity measures through demonstrations and strikes, and the likelihood of their approving the latest measure was not high. Still, most have said they want the country to remain in the eurozone, and eurozone leaders have said that if the referendum failed to pass Greece would be ousted from the joint currency bloc.

Papandreou himself said that he was putting his country above his own position by proposing the vote. He was quoted saying, "I'm not tied to my post. I'm not interested either in being reelected, I'm only interested in saving the country."

Eurozone leaders were furious at the proposal and were blindsided by its announcement, as was the country's own finance minister, Evangelos Venizelos. Policymakers gathered in Cannes, France, for a meeting of G20 nations bluntly told Papandreou that if the referendum failed to approve the bailout and its attendant austerity conditions, Greece would be left to fail and the euro would be saved regardless of the cost to Athens.

ThinkAdvisor's TechCenter is an educational resource designed to give you a competitive edge by keeping you abreast of new tech innovations and need-to-know information that can be applied to your business.